Burnin Down the House

29 03 2011

Some things in life you have to fully commit yourself to or they will end in colossal failure, or immeasurably small success.  When I was a kid I played Evel Knievel by setting up ramps of 2×12 planks and concrete blocks.  I jumped my bike across maybe a five foot “canyon”.  Note, this was before mountain bikes.  Gary Fischer may have been developing his mountain bike in his garage but there was nothing available on the market.  I used a purple girl’s bike, single speed, no shock absorbers, no foot clips, and certainly no helmet.  Why the girl’s bike?  The consequences of failure on a boy’s bike were brutal.  Hitting the ramp at half speed would end in disaster.  I’m sure similar consequences exist for crazy stuff like ski jumping, doing flips on/with anything.  Even when you have an easy play in sports, you have to let it fly or you’re bound to choke.  There are many things you can’t half do.

Fifteen years ago utility deregulation was the rage.  Deregulation has been a boon to consumers in many industries including airlines, and telecommunications.  It’s been brutal to product and service providers that weren’t prepared for the “free market”.  Plenty of airlines went bust and are gone; Eastern, TWA, PanAm, and Braniff to name a few.  It did allow innovative companies like Southwest to enter the market and develop new niches and business models.

Electric utility deregulation had varied results, mostly in different shades of failure.  The darkest shade of failure, pitch black, was probably California where, you guessed it, they hit the ramp at half speed and crashed and burned badly.  They deregulated wholesale prices but capped retail prices to end users.  The fools who approved this are clueless with respect to how markets work.  You have to have price response to the point of use or the system will collapse.  Healthcare anyone?  Consumers kept buying relatively cheap power, while companies like NRG Energy and Enron held all the aces and could charge what they wanted to the utilities.  Result: bankruptcy across the board for the utilities, an Austrian immigrant body builder took over as the Governator in a recall election.

Deregulation didn’t work for electricity for a number of reasons in my opinion.

  • First, the system was built over many decades on a monopolistic, captive consumer, model.  The cost to enter the market as a provider is huge, at maybe a billion dollars for a 500 MW plant.  Smaller plants would be more costly per unit output. …not exactly like starting a coffee joint.
  • It’s instantaneous production and sale, which means producers can charge the same price – so who would build peaking plants, when base load plants can charge the same as plants that are used much less often?
  • The entire economy was built on consistently low-cost power and therefore the “strike price” (say uncle) would be much higher because power is THAT important to doing business.
  • Finally, generators can’t just pick up and move to where demand is highest.  If generators could package their kWh in six packs, cases, or in bulk quantities to distribute to retailers, grocery stores, drug stores, convenience stores, and Amazon.com for consumers to take home and use as needed, deregulation of electricity would work.

Like all these half baked efforts from child stuntmen to electricity deregulation, end users can’t half do an energy efficiency project and expect decent results.  You can’t replace an HVAC system and put in crap for controls or not commission the system and expect results.  You can’t put in a completely different but proven refrigeration system, skip design review by the EE consultant, skip VFDs, skip heat recovery, and skip functional testing of the system and expect more than barely perceptible impacts.  End users may spend 20% extra to implement a new concept but skip the 1-2% needed to make sure it really works and another couple percent on enhancements to capture much of the savings.

This presents a major untapped opportunity with EE programs.  The above refrigeration case was for new construction.  Based on experience in several new construction programs providing services, evaluating programs, and doing retro-commissioning after the fact, I conclude new construction programs generate very little return on program dollar.  The “savings” are relative to essentially an arbitrary baseline.  But what is the market doing all by itself?  Actual attributable savings are relative to what the market, not a consensus reference point developed for something else (energy codes, which aren’t enforced anyway).

We will be doing a new construction market baseline study as part of a major utility program evaluation this summer.  I’ve been in this business long enough to bet a lot of money that most “savings” associated with new construction programs are happening anyway in absence of any program.

So what should programs be doing?  Burn down the house and start over.  Erase 70 years of one bad idea piled on another and start from scratch with a clean slate.  Rather than nibbling around the edges with some stupid occupancy sensors, daylighting sensors, extra insulation, and an efficient chiller (all of which are good but very limited ideas), develop means to completely raze and rebuild (pun intended) building and system designs.

Look, A&E firms are reticent to incorporate changes that make a difference.  Once an A&E team has been selected, they will want to charge exorbitant prices to make significant changes.  To some degree, I don’t blame them.  They charge double in part because of fear of the unknown and in part because they don’t want to do it.  It’s also due to the cheap and crappy market that consumers have been demanding for decades.  They don’t get paid enough to change and programs can’t afford meaningful change either.

Buildings need to be built with systems that are much simpler, low cost, and inherently difficult to dork up.  I have little to no doubt that we can develop a refrigeration and HVAC systems for grocery stores that will reduce energy consumption by about 40% compared to today’s status quo, for both gas and electricity.  The systems would be simpler, with fewer compressors, fewer condensers, fewer fans, less piping and less refrigerant loss.  It would be rugged and difficult to screw up.  If stores were built with this design en masse they would cost no more than the crap that goes in them now.  How?  Because of the simplicity.  Think of it this way.  Look at the power transmission systems built in the 1960s and earlier.  The towers are built as trusses with a bazillion small pieces of iron all bolted or riveted together with a bazillion times 100 fasteners.  What are they made of now?  One giant hunk of steel containing probably no more steel than the old ones.  They are cheaper to build, transport, install, and maintain, and they are probably stronger than the over-designed kludges of the past.  I’m saying something very similar can be done with building design.  

And you can’t develop the concept, hand it over to a contractor and not look at it again until the non-performing results start to come in.  It has to be shepherded through the design/development and commissioned.  THIS is what new construction programs ought to be doing.  But it takes a customer that wants to hit the ramp at full speed, and quit nibbling a little here and a little there with some LED lights and super duper low-e windows and a white roof.

Soon, we will be releasing a white paper that discusses the evolution, or I should say devolution of building design over the past 100 years, and what I am promoting going forward.  Get ready for that.

Tidbits

In an update on A Frivolous Novelty, the all-electric Nissan Leafs are flying off lots at the brisk pace of about 70 per month.  No need to check the decimal point.  That is correct.  About two or three per day, worldwide.  The average Nissan dealer probably sells two Altimas per day, by noon.  Save yours today!

written by Jeffrey L. Ihnen, P.E., LEED AP

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No Brazil Syndrome

23 03 2011

AAAAAAAAHHHH!  Turn it off!  Turn it off!  Turn it off!

Disclosure: I am not a nuclear physicist but I do have the equivalent of a MS degree in nuclear engineering from a classified (as in secret) U.S. nuclear laboratory.

A week ago I was sitting here writing my blog in the aftermath of the Japanese devastation: Billions of dollars of damage, at least 10,000 fatalities, and parents finding their deceased children or elderly parents in smashed vehicles and destroyed buildings.

What is the media absolutely obsessed with?  Why of course, something they know absolutely nothing about.  I have never seen such an onslaught of talking heads blathering about things for which they have no expertise.  Zero.  A woman on TV, a “nuclear industry journalist” talks about “nuclear fire”.  What the hell is that?  There is no such thing.  A common fire is carbon and/or hydrogen getting together with oxygen to form the diabolical carbon dioxide and water vapor, and heat.  This DOES NOT HAPPEN in nuclear anything.  Note some pure metals burn, as in colorful fireworks, but a damaged reactor core is not fireworks.

In another broadcast, one talking head called the Fukushima incident a national security issue, to the United States.  You have got to be kidding me.  I’ll tell you what a threat to national security is: ethanol.  That’s right.  Nothing will turn out rebellion like food shortages, which sparked the Egyptian chaos.

Other sensationalizing includes talking about the nuclear danger while showing pictures of natural gas explosions at an oil refinery.  Nice.  One hundred percent, no connection and no comparison.

How many people have died as a result of the boogeyman, direct nuclear radiation at Fukushima?  Zero that I am aware of.  Nobody died from Three Mile Island either.  Even Chernobyl, the most massive nuclear power plant disaster ever only caused about 50 deaths per The Guardian (UK) and Time magazine.  More on Chernobyl later.

Even if you are an intelligent but nuclear-ignorant reader, you have to ask yourself, what are they talking about?  For instance, the Wall Street Journal reports that at one point radiation levels at the gate of the nuclear complex in Fukushima was 11,000 microsieverts per hour equivalent to what a person receives in 11 years.  What?!  They are comparing a rate (in units per time), to units.  It’s like saying I drove 90 miles per hour to work today, the equivalent of what I would drive in a week.  What?

It goes on to say the Nuclear Regulatory Commission’s dose limit is 10,000 microsieverts “per nuclear event”.  What is that?  The reader doesn’t know but it sounds scary and sells.  The average person gets 6,200 microsieverts per year from background junk – by just being alive and on planet earth.  People working with radiation on the job are limited to 50,000 per year.  Add all that up and tell me what you get.  It’s all hype.

Although I have not heard because the press knows nothing, it sounds as though the Fukushima nukes are boiling water reactors.  Although I believe most nukes in the U.S. are not boiling water reactors, the Fukushima and U.S. reactors are thermal nuclear.  A thermal nuclear reactor simply means the fuel Uranium isotope U-235 will absorb a “thermal” neutron and become unstable.  When it becomes unstable, it fissions, splitting into two daughter products; an array of atoms from all over the periodic table.  With daughter products come other radiation, namely alpha and beta particles, gamma rays, neutrons, and of course, a lot of heat (E=mc^2 stuff).

A thermal neutron is one that has given up most of its kinetic energy after it was emitted from a fission or puked out of an unstable daughter atom of some sort.  They lose energy by bouncing off water molecules like billiard balls.  The water serves as the moderator, as in, lessening the intensity of something – and it is also the coolant that takes heat from the reactor to generate steam.  Once neutrons are released, they are either absorbed by the fuel to make more fissions, leak out of the reactor core, or get absorbed by control rods or “poisons”.

A nuclear reactor is a highly stable system.  If it weren’t, it would be a bomb.  Therefore, a reactor WILL NOT EXPLODE!!!!  So what were the explosions at Fukushima then?  I’ll get to that.

Nearly all neutrons released are instantaneously released upon fission of U-235.  These are called prompt neutrons.  A tiny fraction are delayed neutrons that have an average of seven seconds (roughly) delay between a fission and their release.  Without the delayed neutrons, a reactor would be unstable, it would go prompt supercritical – boom.  The delay provides just the right balance so the system can have feedback and self correct.  How does it do this?  Fluctuations in water density.  When heat transfer is reduced (less turbine power and electricity production), the water moderator/coolant gets hotter and less dense.  Fewer water molecules in the reactor mean fewer collisions for neutrons.  More of them leak out of the reactor.  Fewer are absorbed by U-235 to fission and produce heat.  The coolant cools, gets a bit denser and the fuel starts to give off more energy again.  Beautiful.

What about those explosions at Fukushima?  Spent fuel is not like a half burned log.  It essentially looks the same as fresh fuel but its composition changes slightly after all the U-235 fissions occur.  But it is radioactive, which simply means daughter products are still puking out alpha and beta particles, neutrons, gammas, and relatively low levels of heat.  At Fukushima, spent fuel is kept in a pool above the reactors apparently.  Why?  No idea.  But the radiation ionizes the water that keeps it cool and shields radiation.  Ionization of water produces hydrogen, which is explosive, and takes practically nothing to set off.  This caused the explosions and release of low level radiation to the atmosphere.

How about the fuel?  Both the spent fuel and the fuel still in the reactors need to be cooled because of the decay heat.  Otherwise, they will melt, sort of like a pillar of wax.  The fuel will NOT explode.  Remember, to maintain a chain reaction, to remain critical, requires water to moderate neutrons.  If there is no water, the neutrons all get away BUT there is also no cooling.  If there is no water and there is not enough air cooling, fuel damage (distortion) may occur, but I don’t know if it would melt.  It would have to exceed 3,300F – pretty hot – ~600F hotter than the melting point of steel.  Regardless, it isn’t going to melt through to the core of the earth like Doctor Evil’s subterranean nuclear-tipped Vulcan drill, and explode.

How about the radiation?  Radiation is given off by physical matter.  It isn’t a mysterious uncontrollable cloud of cancer.  Direct radiation from the nuclear plant falls off with the cube of distance from it.  For example, to reduce exposure in half, one would have to move from 1.0 mile to only about 1.25 miles away.  At 2 miles you would only get about 12% of the radiation compared to one mile.

This radiation hype reminds me of the lead-tainted toys from China.  While there is no excuse for having lead contaminating toys, it is harmless, unless you grind it up and mix it in Johnnie’s oatmeal or he snorts it like cocaine.  Similarly, a person almost has to come in physical contact with or ingest radioactive material.  Radon, which Iowa has more of than any other state, has to be inhaled and by chance the radon has to release a harmful alpha particle while it’s in your lungs.  The radon isn’t harmful.  The particles it spits off are and they have to be spit out while in your lungs.

Practically anything will stop alphas and betas; skin for example will.  Alpha and beta damage typically requires ingestion.  Neutrons are more penetrating but water will knock these down quickly, which is why water is used outside the reactor to shield neutrons from getting away.  Gammas can have a lot of energy and may take thick lead or concrete to stop – hence lead shielding around reactors.  Damage can occur just by being in close proximity to gammas.  Just don’t carry things like Cobalt 60 in your pockets.  So like the powdered lead, for the general public danger from Fukushima is really only going to come from radioactive air-borne contamination.  How do things get air borne?  An explosion is a good way but explosions occurring at these plants are due to hydrogen as discussed above.  It is nothing like a bomb where all daughter products are released and air borne.  Radioactive daughter products are likely well contained in the fuel at Fukushima.  Daughter products, many of which are gaseous, would first need to blister and rupture the fuel pellets and THEN get out of the fuel’s cladding.  However, blisters are not going to grow when the reactor is shut down as these were.

Get a grip.  The chance of adverse health effects from nuclear power plants is less than being attacked by terrorists, which is much lower than dying in a plane crash, which is much lower than being struck by lightening, which is much, much lower than dying in a car crash.  If you are concerned about nuclear plant health effects, you ought to also be on the lookout for man-eating chickadees, and certainly bananas, which are radioactive by nature.

Lastly, the only time “Chernobyl” should be used in reference to this Fukushima incident is, “Fukushima bears no resemblance to Chernobyl, whatsoever.”  Chernobyl was a carbon, not water, moderated reactor.  When carbon gets too hot, unlike water, it ignites – go boom.  Chernobyl had no containment vessel either.  The reactor actually blew to bits.

written by Jeffrey L. Ihnen, P.E., LEED AP





Biscuit Discipline

15 03 2011

Like any respectable pets, our dogs Bailey and Atlas have us trained, very well.  I roll out of bed on the weekend, slog downstairs to make a strong mug of coffee, light a fire (in the wood stove), sit in my chair to read the paper and then the dogs position themselves in their kennels with their entitlement look.  They were trained since puppyhood to like being in their kennels so when they kennel up, they get a b-i-s-c-u-i-t.  We have to spell certain things out or use aliases to avoid undesired reactions.  For example, we say “There is a bushy tailed mammal on the bird feeder” lest we get the dogs going bazookas scratching up the wood floor, knocking things over, and ruffling floor rugs into piles.

Everything that has resulted in kenneling in the past is now used to leverage a biscuit for the entitlement dogs.  After taking them outside for a wiz, they get in the kennel for a biscuit.  Don’t get a biscuit?  Whine incessantly.  When I come down the stairs in the morning to put on shoes for work, they get in their kennels.  After their morning and evening meal.  In the kennel.  When I come in from filling the bird feeder.  In the kennel.  Their willpower is staggering.  Crack open a beer on the weekend, WOW.  Get the food out or prepare for the consequences – barks with a pulse wave that will take out a communications system.  It is time to eat, NOW.  After the meal, it’s time for a rawhide – NOW.  The rawhides are like their post-meal cigar.  Lastly, to get them to go outside for a late night wiz before bed, they won’t budge from wherever they’re snoozing unless I break out the ice cream bucket.  You remember faking sleep as a kid?  That’s what they do for the ice cream.  They each get a “bite” of ice cream, which I don’t think touches their digestive system until it lands somewhere in the middle of their small intestine.  They have a pneumatic ingestion system – like a vacuum cleaner.

As I have been in the energy efficiency business for some fifteen years, I am coming to the conclusion that nearly all energy efficiency measures have a strong behavioral component.  Almost nothing escapes the effects of behavior.

In Upside Down Consequence of EE, I expanded on the fact that in many cases, energy efficiency actually increases total energy consumption on a global basis.  There is rebound effect, which refers to consumers using energy efficient equipment much longer than they otherwise would because they perceive the thing in question to use a tiny fraction of energy compared to what it replaced would use.

Energy cost is very much like a tax.  The less people pay into local, state, and federal cash infernos, the more they have to use for themselves.  Hardly anyone other than perhaps some survivors of THE Great Depression, buries their money in the backyard or stuffs it under their mattress.  They either buy stuff, which takes energy to produce and deliver to their home or they may invest it in companies that provide goods and services, both of which consume energy.  As you read this you are probably consuming energy because you are employed by the energy efficiency market; otherwise you might be lying in bed, unemployed or out collecting nuts and berries between unemployment checks.  You’ve got office equipment, facility energy consumption, transportation energy to get to work (if you walked, it takes energy to cook the extra oatmeal).  You are a walking, talking testament to this phenomenon.

Actually, I have no problem with these phenomena.  Smart utilities understand this as well.  They know energy efficiency doesn’t mean less consumption, it means getting more from every BTU and Joule.  It falls in the nebulous regime of “saved or created”; one where we would have consumed XYZ if it weren’t for these programs.

More examples.  One of my gripes about the ban on incandescent lights is that I have certain applications where the incandescent bulb is the best solution.  These are applications where I need light for a few seconds to pick stuff out from the shoe pile, closet, or pantry.  My last incandescent flood light burned out in my main thoroughfare to the garage.  Unlike some other anonymous occupant of my house, I am obsessively habitual about turning stuff off when it is not needed.  Since the CFLs take at least a minute to come up to brightness, they are training me to leave them on because I hate dim more than I hate wasting energy.  So instead of having 86 Watts of lights on for five minutes when I get ready to go out for a run in the morning, I have 39 Watts burning for an hour.  Do the math.  CFLs waste energy.  I don’t care about this “little” difference in consumption.  In the garage, due to the same issue, I have a light on a timer that controls a CFL to burn in the morning and evening darkness.  Rather than maybe a 200 Watts for two minutes, I have 26 Watts for several hours.

In addition to loathing of pathetic light levels, and I’m talking about less than 20% of decent office lighting, I have in the back of my mind the fact that turning lights on and off shortens their life, or more formerly speaking, it increases mortality rates.  On top of that, I know I cannot or will not just throw CFLs in the garbage.  There is all kinds of crap in there, in addition to mercury.  What is in the big whomping base thing?  It isn’t play dough.

I am a breathing and probably irrationally reasoning laboratory for actual energy efficiency impacts.  Impact evaluator, I’m your worst nightmare.

This article discusses more of these issues and as I read it, I thought this would get a lot of blowback from many in our industry.  But I think there is a lot of truth to it, except driving more because a gallon a gasoline goes further.  Driving enjoyment or tolerance and gas mileage are inversely proportional.  Who wants to take a Prius out for a tire-screeching exuberating drive on the winding roads in the beautiful countryside around here?  That’s just wrong.  You need at least something like my tiny Acura which gets a respectable 30 mpg.

Darn.  I didn’t get nearly as far as planned.  I will have to continue this discussion with an extension to nearly every other measure and technology, later.

Click here to see the cartoon version of this week’s Energy Rant.

Tidbits

If you have read this blog, you know I don’t support ramming energy efficiency down the public’s throats.  I was not in favor of the ban on the incandescent bulb, and you can see why above.  (Yes, I can buy a more expensive halogen)  However, I would not move to repeal the law, if that makes any sense.

I have had a great interest in politics and macroeconomics for over twenty years, essentially since college.  There is decent policy, really bad policy and everything in between.  I’ll just say that I’m all in favor of gridlock and government shutdowns because if they aren’t passing laws, they aren’t damaging the country.

As they say, good policy makes for good politics.  A law may be extremely unpopular to some but if it’s good policy, the opposition will melt away over time.  Then there are bills that are just stupid.  They are nothing more than antagonizing the other side; a stick in their eye, and they make for really bad politics.  Which brings me back to the repeal of the incandescent ban.  Take a look at these incredibly stupid comments by Rand Paul.  That will land you on the island of political loons.  Who knows – they may push this through, but it wouldn’t be good politics.  Appealing to just 20% of your most rabid constituents and otherwise only talk radio people or far out bloggers is really moronic and self defeating to one’s overarching objectives.

written by Jeffrey L. Ihnen, P.E., LEED AP





Nicht Tee Kugel, Dos

8 03 2011

This week I am testing an additional medium for the The Energy Rant; the cartoon.  Click here to try it out.  Send email comments with your thoughts regarding this mechanism to me at jli@michaelsenergy.com.

Major barriers to EE for large commercial and industrial end users include;

  • Lack of time
  • Lack of expertise
  • Lack of capital
  • Risk aversion

If you don’t think end users are short on availability, just ask them.  Most end users don’t have time to commit to energy efficiency projects and most of the rest think they don’t have time.  The ones who really don’t have time get seven paid holidays and two-three weeks vacation while the latter group gets eleven paid holidays and six weeks vacation, if you know what I mean.

Most commercial building owner/occupants think of lighting retrofit, adding roof insulation and replacing windows or maybe replacing a boiler they think is 60% efficient.  Lighting may be ok but the rest of this stuff is almost always going to have a negligible impact on energy consumption.  Efficiency to most industrial end users means, just keep it rolling – widgets per shift, less maintenance.  Many times increasing widgets per shift and reducing maintenance is accompanied by energy efficiency, especially when EE is the primary reason to do project.  However, there are bails of cash on fire in many places that are invisible to folks who focus solely on keeping things going.  In other cases, we’ve seen industrial end users think they’re going to meet their 10% reduction goals by turning lights off.  Pssst.  Your lights only consume 4% of your energy bills.

Not enough money.  I’ve investigated commercial real estate from both an owner’s and leaser’s perspective.  The owner makes the tenant pay the utility bills in many/most cases, so there is little incentive for the owner to do anything.  The tenant’s perspective is “I have a three-year lease, this isn’t my building, and I don’t even know if I’ll be here after three years.”  For industrial end-users, capital is very precious and can take force majeure to get.

Then there is a real risk that savings won’t transpire as indicated.  Lighting is about the only measure customer’s can count on with high probability.  This is unfortunate because it doesn’t need to be that way.  It’s just that there are a lot of schlocks who make assumptions like an old boiler is 60% efficient.  As my boss says, if a boiler is really 60% efficient, turn and run as fast as you can because it may be about to blow.  We’ve seen schlock estimates indicating over one therm per square foot savings by adding insulation.  You might achieve these savings if one of the walls on your facility was missing prior to implementation.

Now we arrive at the subject of this week’s rant: efficiency bid programs.  We see a lot of efficiency bid programs, some of which are delivered by clients of ours.  They are typically an alternative to conventional custom efficiency incentive programs provided side by side.  They work like this: develop a project with cost and savings estimates and submit a proposal to the utility for an incentive.  The incentive is always greater than the standard custom efficiency incentive or why bother with the development and bid?  The program is purportedly competitive – i.e., a “free market” for incentives to maximize bang for the program buck.  If it’s competitive, somebody must lose.  This isn’t tee ball.

I cannot see how these programs don’t get slaughtered in a net to gross analysis.  Net savings are actual savings attributable to the program.  Gross savings are actual savings, period.  What’s the difference?  Net includes the effects of the program.  Did the program influence the customer’s decision to move forward with an EE project?

Let’s get back to the barriers now.  Time.  It takes just as much time for a customer and a contractor and/or consultant to develop the project for bid as it does to develop the project for a standard incentive.  And it takes more time to shepherd the thing trough the bid process.  Efficiency bid takes MORE time.  Which leads me to…

Risk.  As mentioned, there is risk the project won’t generate savings because the energy analyst is a schlock.  But for efficiency bid, there is risk, presumably, that there won’t even be an incentive after thousands of dollars are spent developing the project.  Remember, if this program is competitive, somebody loses.  Who is going to spend gobs of time not knowing whether they will get an incentive?  If the standard custom efficiency incentive is the consolation prize and it’s enough for a “go”, then why would the program waste money on a premium efficiency-bid incentive?

True story, last week we considered pursuing one of these bids for an industrial customer for which we had done a study.  We decided against it because (1) we only had a month to get it submitted and in that month you need to get the customer on board and a month is a nanosecond for a capital intensive corporation to allocate (2) extremely scarce capital, and therefore, (3) it was too big a risk for even us, the consultant, to get the whole thing pulled together in a month, at the mercy of the corporate bean counters.  There is far too little upside for our risk of getting something we have almost no control over to happen.

Somebody has to lose if this is competitive.  Most likely only the biggest customers are going to pursue these projects.  A major customer spends a bunch of time to put a bid together and then is told, sorry, you lose.  Now the utility is faced with a colossal PR disaster with a major customer that will raise Cain all the way to PSC’s office.  OR, the customer takes the standard custom incentive as a consolation prize, in which case the whole bid thing was a ruse to get extra program money – a free rider.

These efficiency bid programs probably look great on the surface but if one really understands market barriers and how large end-users allocate and budget capital, it seems like a big free rider program to me.  They take more time, not less.  They add risk rather than decrease risk.  They potentially provide more capital assistance, but at what I see is a disproportional addition of risk.

Tidbits

  • Ameren Missouri says they will pare back EE programs because they are costing shareholders return on investment.   Wow – although I consider it unfortunate, it’s understandable and refreshing to some degree to get straight talk from a utility that actually believes this.  I think a good portion of utilities really think this way but lead on as though they are saving the universe.   Do what it takes to look good to the regulators but with minimal real impact.  Come to think of it, these utilities may be like The Firm.  Once a partner in the EE programs and made aware of the scam, you’re stuck unless you want your car to accidently explode when you leave for home.  BTW, programs can be developed for utilities to make money on EE.  Just call 608.785.1900.
  • Don’t look now, the Chevy Volt has even less than the advertised 40 mile battery range – like about 40% less during cold weather as batteries don’t work well in cold weather.   Not only that, as mentioned in “A Frivolous Novelty” it takes about 5 kW to heat the cabin of the vehicle.  I “mistakenly” thought this was a big deal.  Not really.  At about 0.5 mile/kWh, the battery juice is consumed in less than a half hour.  That’s 50 kWh for 25 miles of driving but only 2.5 kWh for heating.  Who is going to pay $40,000 to be limited to 25 miles between charging?  Raise your hand.  Not all at once, it may make the planet wobble.
  • In one last bit of refreshing honesty, this guy provides a good assessment of plusses and minuses of the ban on the standard incandescent lamp:   Good assessment – far above average for that matter.

written by Jeffrey L. Ihnen, P.E., LEED AP





Pregnant Snake Armpits

1 03 2011

Although I don’t appreciate talking about it, we have a black list of companies and organizations for which we will not again partner with, work with, or bid their request for proposals.  What type of activities land somebody on this list?

Companies or organizations that take our business development efforts and give it to someone else.

We are working on retro-commissioning for a major player in the Midwest grocery market.  As with most of our investment-grade studies for energy retrofit or retro-commissioning, we like to use contractors to provide us with pricing because we expect they will get the work and therefore, the pricing is going to be more accurate in addition to having accountability for the prices at implementation time.  The contractor was very reluctant to help because he was afraid he would help develop pricing and concepts and then somebody else would get the work.  I laughed out of familiarity with such shenanigans.

Unfortunately, while working on the grocer project, we were victims of just what the contractor was talking about, on a different project.  We had completed an energy study for a quasi non-profit, quasi-government outfit (Jeff, how many times do you have to get burned before you learn?) and we were moving into developing the design and provided a proposal.  We had already pretty well nailed down the scope of the project.

Inject another righteous government agency to “help” this end user.  Well, they took our developed scope of work and put out a competitive request for proposals with OUR work on it.  So now we’re faced with throwing away all the development we had already done just to be competitive with the other bidders who were handed this on a silver platter.  As I wrote last week, it’s a rainy day in hell when a government outfit takes anything but the low bid, otherwise known as the cheapest, crappiest system imaginable; one that meets only the major recognizable features, like equipment efficiency.    There are plenty of places to cut cost on the design and on the project itself.

That agency is blacklisted.

Companies that use our credentials to win a job and then dump us like a cheap date.

Last year we had “teamed” with a local architect on a LEED project for a new nearby federal facility.  I must digress for a moment.  This project was in progress when the “stimulus” was passed – you know the one that was supposed to break loose the shovel-ready projects.  If this wasn’t shovel-ready, I don’t know what was.  The plans and specifications had been lying about for year or two waiting for approval to proceed.  It drug on for months once the stimulus passed.

Come to think of it, this one too was in our hip pocket and they bid the work out again.  I’m not sure why because the design was 90% completed but I suppose some milestone had passed and federal statutes required a rebid or something.

So now that it’s competitive, once again after doing a bunch of development and front end work, we have to cut cost to beneath the cheap and crappy level.  So our client, the architect asked us to chop our down our price.  We provided a counter offer and waited.   And waited, and waited.

We already had 20 or so LEED projects under our belt compared to near zilch for the architect.  Finally, we get a hold of the scumbag, er, I mean client, and he says, oh yeah, “The good news is, we won the project.  The bad news is, you aren’t on the team.”  This is lower than a pregnant snake’s armpit.  (stolen from the aussies and modified by me).

Blacklisted.

Companies or organizations that use our proposal in attempt to beat “their” firm down in price.

This one is more difficult to nail down but let’s just say if it walks like a duck and quacks like a duck…  A large organization pursued by a bunch of consultants / contractors has been working with a provider for years and maybe they want a new or modified service, or maybe it’s just the same stuff they’ve been provided with many times.  Now they suddenly want a proposal from us.  This is either a Sarbanes Oxley corporate requirement (ok), process to actually evaluate invited bidders (ok), charade to fake a bureaucrat into thinking the chosen one was competitively selected (not ok), or a hammer to beat down the firm they know they are going to hire (not ok).  Essentially, we are wasting a bunch of our time to benefit only the buyer.  The other bidder(s) gets screwed too.

Blacklisted after a few of these – typically takes a few rounds of abuse to have this scam come into clear focus.

Wolves in sheep clothing.

Over the years we’ve been pursued by numerous companies that would like to partner with us.  It would be a marriage made in heaven.  Next step: an initial public offering on the NASDAQ!  Uh huh.  Sure.  These dirt bags just want access to our clients and for some reason, controls companies and performance contractors make up a substantial portion of this bunch.

Show me the money before I lift a finger or you are blacklisted.

A better way.

Recently a business partner stated it well, “What do we have in business and life but our reputations?”  And I always say to our company’s people, you best treat well everyone you work with in the company, our clients, and even the competition.  You never know who will one day be your client or supervisor, employee, or maybe someone you want to partner with, or get help from.

Everyone involved in business transactions should benefit – consultant, owner, utility, shareholders, and contractor.  Clearly and unfortunately, some entities think they can get ahead while screwing others and thinking they are getting a good deal or making extra profit.  Sooner or later these outfits run out of victims to exploit.  It shouldn’t be a fixed pie that everyone fights over.  It should be a pie from which everyone’s slice grows.

Tidbits

It appears Sacramento is contemplating the same fateful robbery of EE program dollars by hocking the stream of energy efficiency money.   In WI, this grab actually happened and crippled programs.  Ironically, or maybe not so, they would be both carried out under Democrat governors.

Outrage of the Week

Maybe I should start an outrage of the week?  Well here is the inaugural.  The DOE is calling it “Market-Driven Solutions” to work with behemoths like Target and Wal-Mart to develop new efficient rooftop heating and cooling units.  Is this the same Wal-Mart with $420 billion worldwide sales and $14.4 billion in annual earnings?  Chu, you have got to be kidding me.

Like General Electric, why doesn’t Wal-Mart get back to what they used to do well; innovate, rather than going to Washington with its hand out.  Time to put a “strong sell” on Wal-Mart stock.  They’re washed up.

This is a free market solution: an RFP for manufacturers of rooftop units to develop units that meet Wal-Mart’s specifications, reliably, and supply them with heating and cooling equipment for the next 100 stores.  After 100 stores, the incumbent has a huge advantage for (hopefully) proven success.

A portion of the $1.6 trillion, or as I like to say $1.6 million million, deficit is funding this kind of crap.  This wouldn’t be funny even if it weren’t true.

Oxymoron of the week: “DOE facilitates market-driven solutions”.

written by Jeffrey L. Ihnen, P.E., LEED AP